Monthly Archives: March 2009

Because of a law that the Congress passed in 2001, the estate tax, which at is 45 percent this year with an exemption up to $3.5 million in assets, will be entirely repealed in 2010 before abruptly returning to its former rate of 55 percent rate in 2011.

Think there might be a few rich grannies pulled off a few respirators on December 31, 2010?

A pair of Australian economists, who studied the repeal of that country’s inheritance tax in 1979, seem to think there very well could be. They found (.pdf) evidence of so-called “death elasticity”: statistically significant aberrations in reported death rates in Australia on and around June 30, 1979, when the repeal of the estate tax took effect. A relatively high number of Australians who would have been subject to the tax found a way to postpone their deaths until after the 30th. (Or, just as plausibly, their relatives found ways to conceal the moment of passing on their death certificates).

Postponement of one’s death, of course, isn’t such a problem. But because of this one-year glitch in the tax code, it will actually incentivize dying in 2010 instead of 2011. And it’s undoubtedly much easier to speed up one’s date of death than to slow it down. Talk about perverse incentives.

UPDATE: Senator Specter ended speculation on where he would come down on the Employee Free Choice Act by declaring, on the Senate floor, that he would oppose the legislation until the economy improves.

“The problems of a recession make this a particularly bad time to enact Employee’s choice legislation,” he said. “Employers understandably complain that adding a burden would result in further job losses. If efforts are unsuccessful to give labor sufficient bargaining power through amendments to the [National Labor Relations Act] then I would be willing to reconsider Employees choice legislation when the economy returns to normalcy. I am announcing my decision now because I have consulted with a very large number of interested parties on both sides and I have made up my mind.”

Addressing the politics of the situation, he declared: “This announcement should end the rumor mill that I have made some deal for my political advance. I have not traded my vote in the past and I would not do so now.”

Labor officials are incredibly distraught and, in some cases incredulous, noting the Specter co-sponsored the bill in 2003 and voted for cloture just last year. But while it is a setback for the legislation’s chances, Democrats are not conceding defeat. According to the Huffington Post’s Ryan Grim, Senate Majority Leader Harry Reid declared after Specter’s speech that “He’s not the only Republican who has indicated a willingness to consider something being done… He’s not the only suspect.”

Some big news emerged Tuesday in regards to the debate over the Employee Free Choice Act, with a prominent Republican strategist declaring that Sen. Arlen Specter will vote against cloture on and passage of the bill.

Americans for Tax Reform president Grover Norquist broke the news during a speech at the Capital Research Center Labor Summit, saying that Specter’s chief of staff had let it be known that he would oppose the legislation, which would make it easier for unions to organize. Norquist’s remarks were subsequently reported on the Twitter account of Larry Farnsworth – the former Speechwriter and Deputy Press Secretary to Speaker Dennis Hastert — and seconded by Dave Weigel of the Washington Independent.

If true, it represents a major blow for EFCA supporters. Specter was the one Senate Republican to vote for cloture when the bill came to the floor in 2007. And with 60 votes needed to avoid a filibuster, his defection presents a major parliamentary hurdle for the legislation’s passage.

The Pennsylvania Republican is likely to face a major primary challenge from Club For Growth president Pat Toomey in the 2010 election, which may have factored into this apparent decision.

Said Toomey of Specter’s announcement: “It’s nice to see Sen. Specter reverse his position in a positive direction on card check, but I wish it didn’t take primary opposition to get him to do it.”

On the other side of the political coin, several unions had let it be known that they would have put their political muscle behind the Senator had he voted to support EFCA.

According to an attendee at the CRC Labor Summit, Norquist “was giving a speech at lunch time” when he told the crowd: ‘By the way I have breaking news. When I was eating lunch I got a call from Specter’s Chief of Staff saying he was voting against cloture.’ [The Chief of Staff] had apparently read a prepared statement to Grover over the phone and the Senator’s office will apparently be releasing that statement later today.”

A call and email to Americans for Tax Reform were not immediately returned.

United Steelworkers president Leo Gerard likes to say that Washington policymakers “treat the people who take a shower after work much differently than they treat the people who shower before they go to work.” In the 21st century Gilded Age, the blue-collar shower-after-work crowd is given the tough, while the white-collar shower-before-work gang gets the love, and never before this week was that doctrine made so clear.

Following news that government-owned American International Group devoted $165 million of its $170 billion taxpayer bailout to employee bonuses, the White House insisted nothing could be done to halt the robbery. On ABC’s Sunday chat show, Obama advisor Larry Summers couched his passive-aggressive defense of AIG’s thieves in the saccharine argot of jurisprudence. “We are a country of law — there are contracts (and) the government cannot just abrogate contracts,” he said.

On Tuesday, House Democrats introduced the Employee Free Choice Act, a vitally important package of protections that would help restore working people’s much-denuded right to join a union if they so desire.

There’s nothing more terrifying to corporate America than the prospect of dealing with its workforce on an even playing field, and, along with its allies in Congress, it’s pulling out all the stops to keep that from happening.

The Chamber of Commerce, D.C. lobbyists, firms that rely on cheap labor and a host of “Astroturf” front groups have built a massive war chest they’re using to try to defeat the EFCA and other efforts to put a check on corporate power and rebuild a declining middle class.

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